Correlation Between Aerovate Therapeutics and Ensurge Micropower
Can any of the company-specific risk be diversified away by investing in both Aerovate Therapeutics and Ensurge Micropower at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aerovate Therapeutics and Ensurge Micropower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aerovate Therapeutics and Ensurge Micropower ASA, you can compare the effects of market volatilities on Aerovate Therapeutics and Ensurge Micropower and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aerovate Therapeutics with a short position of Ensurge Micropower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerovate Therapeutics and Ensurge Micropower.
Diversification Opportunities for Aerovate Therapeutics and Ensurge Micropower
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aerovate and Ensurge is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aerovate Therapeutics and Ensurge Micropower ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensurge Micropower ASA and Aerovate Therapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aerovate Therapeutics are associated (or correlated) with Ensurge Micropower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensurge Micropower ASA has no effect on the direction of Aerovate Therapeutics i.e., Aerovate Therapeutics and Ensurge Micropower go up and down completely randomly.
Pair Corralation between Aerovate Therapeutics and Ensurge Micropower
Given the investment horizon of 90 days Aerovate Therapeutics is expected to generate 28.89 times less return on investment than Ensurge Micropower. But when comparing it to its historical volatility, Aerovate Therapeutics is 4.85 times less risky than Ensurge Micropower. It trades about 0.02 of its potential returns per unit of risk. Ensurge Micropower ASA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Ensurge Micropower ASA on September 12, 2024 and sell it today you would lose (20.00) from holding Ensurge Micropower ASA or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 70.69% |
| Values | Daily Returns |
Aerovate Therapeutics vs. Ensurge Micropower ASA
Performance |
| Timeline |
| Aerovate Therapeutics |
| Ensurge Micropower ASA |
Aerovate Therapeutics and Ensurge Micropower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerovate Therapeutics and Ensurge Micropower
The main advantage of trading using opposite Aerovate Therapeutics and Ensurge Micropower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerovate Therapeutics position performs unexpectedly, Ensurge Micropower can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ensurge Micropower will offset losses from the drop in Ensurge Micropower's long position.| Aerovate Therapeutics vs. Adagene | Aerovate Therapeutics vs. Acrivon Therapeutics, Common | Aerovate Therapeutics vs. Rezolute | Aerovate Therapeutics vs. AN2 Therapeutics |
| Ensurge Micropower vs. Ouster Inc | Ensurge Micropower vs. Kopin | Ensurge Micropower vs. Vicor | Ensurge Micropower vs. Fabrinet |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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